5 Helpful Tips on How Your Company Can Avoid Being Sued
As a business owner, your top priorities are usually earning profits and growing. Lawsuits aren’t the first thing that comes to mind. They’re unpleasant things to consider. However, unexpected legal events can end up destroying your business’ finances and operations if you aren’t careful.
Getting sued could even put you, as an individual, at risk. Don’t get blindsided when your company gets sued. Take the necessary steps to limit the chance of ending up in court:
Treat Employees with Respect
Let your employees know you appreciate them. Implement a system for them to voice concerns or complaints when necessary. Address concerns in a timely manner. When your company’s employees know the guidelines in place, employee satisfaction stays high and frustrations are limited.
Provide an employee handbook with a clear set of guidelines laid out for workplace communication and conflict. Go over it with your employees on a regular basis to make certain everyone understands the workplace expectations.
Follow the specific employment laws applicable to your company and the issues that come with employment-related issues such as workplace discrimination, contract agreements, and other regulations applicable to current employees and former employees.
An experienced employment attorney can help your company make sure you remain in compliance with federal and state, so your employees can feel respected and valued in your company workplace.
Identify an Appropriate Business Structure
Many business owners set up shop and operate as sole proprietorships. This is a common way to start out.
However, operating as a sole proprietor could put you at a major risk in the event your company is sued. As a sole proprietor, your business—along with many of your personal assets—become easy to attack in a court of law.
Review business structures with a trusted advisor and find one compatible with your company. Corporations and limited liability companies (LLCs) can decrease the chances of a lawsuit affecting you as an individual.
Forming an entity will separate your company’s finances from your own, so your personal assets are safe. When identifying your company structure, consider any new tax regulations, reports, and additional laws you, the business owner, may be subject to.
Have a Solid IT System
As most businesses conduct a significant portion of their operations on computers, it’s important to have rules in place for your company computer systems. If your company’s computer system were to go down, it could open you up to potential lawsuits from clients, vendors, or customers if you’re not able to perform certain agreed upon work duties.
Keep your antivirus and security software up to date so the company isn’t vulnerable to cyber-attacks or hacking threats. Have a set of backup files stored either in the cloud or a safe place off site.
Don’t leave your IT system open to threats that may end up hurting your company.
Get Necessary Insurance
Added insurance and extra contract protections may seem like an unnecessary expense until you consider how costly defending a lawsuit can be.
At a minimum, all businesses should carry liability insurance. The policy may provide defense and damages if you, your employees, or your business services cause damage or injury to a third party. If you own a storefront, for example, your company would be covered if a customer were to trip and fall in the place of business.
Consider the types of insurance important to your company’s industry. Professional service providers such as consultants should obtain errors and omissions insurance to protect the business should a customer or client accuse your company of making some sort of error.
Understand the different unexpected scenarios your company may encounter and get the necessary insurance to be protected if sued.
Hire an Experienced Attorney
While you can take steps to protect your company from being sued, understanding the laws and regulations specific to your area and industry can be a challenge. You’ll want a legal team who can advise you on every aspect of the legal landscape and how your company fits into it.
An experienced business attorney can help you make informed decisions for your company. He or she can assist with setting up proper processes and legal structure to minimize risk and liability.
Stibbs & Co. provides a seasoned team of legal experts who can help you select the appropriate entity type for your business and give practical advice specific to your business goals. You need an attorney that understands your expectations and business capabilities. Make our team your team.
Contact one of our experienced attorneys today to lay a strong foundation for your business.